Willingness to Pay for Hermetic Grain Storage Bags in Malawi

Abstract

This study estimates willingness to pay (WTP) for hermetic grain storage bags in a sample of 116 very low-income farmers, about half of whom had attended bag-use demonstrations designed to demonstrate how these bags prevent damage from mold and insects. WTP was measured using Becker-DeGroot-Marschak (BDM) auctions, accompanied by a survey regarding respondents education, household wealth and knowledge about aflatoxins that are released when mold is allowed to grow on the grain. We found a mean WTP of 311 Kwacha ($0.42) for one bag, well below the market price around 750 Kwacha, and no significant association between a respondent s WTP and their attendance at bag-use demonstrations, aflatoxin knowledge or education and wealth. At current market prices, we found no evidence that these bags would be commercially marketable in these communities, even after bag-use demonstrations. A systematic review of the literature suggests that commercial sales of hermetic bags may be possible for buyers in areas of less extreme poverty, where households are more able to make such investments in pursuit of longer-term payoffs in food safety and storage. Acknowledgement : This report was funded by the American people through the United States Agency for International Development (USAID) via Cooperative Agreements AID-FFP-A-14-00006 and AID-OAA-A-15-00019 to Catholic Relief Services (CRS) for the UBALE project. We are grateful to all respondents, UBALE partners and CRS-Malawi staff for their help, and especially thank Angela Tavares and Juma Masumba for their guidance and support. Ethical approval was obtained from the Tufts University IRB as study #1703012, and from the Malawi National Commission for Science and Technology as Protocol P.06/17/181. Contents do not necessarily reflect the views of CRS, USAID or the United States Government.